Protective insurance policies now norm for top college prospects

So about a month ago, Turner bought a policy through a program run by the NCAA that will pay out should he suffer a career-ending injury and never make it to the NBA. That helped the likely 2010 first-rounder eliminate any nagging worries as he prepares to play for Team USA in the upcoming World University Games and lead the Buckeyes to the NCAA tournament for the second consecutive season. "It's just a little comfort," Turner said.

These days, almost every collegiate player with a chance to be drafted into the NBA or NFL seeks that comfort in the form of a policy either through the NCAA program or through a private insurance agent. Tyler Hansbrough, who will be drafted into the NBA on Thursday, was covered by such a policy every minute of his North Carolina career. Florida quarterback Tim Tebow, the football analogue to Hansbrough right down to the "Where will he fit in the pros" questions, bought a policy after deciding to return for his senior season. In a conversation about coverage that had nothing to do with a two-deep zone, Gators coach Urban Meyer urged Tebow to get the policy. Tebow himself hasn't given it another thought, because he never intends to collect. "Do you know how often that happens?" the 2007 Heisman Trophy winner asked after Florida's spring game. "Very rarely."

Eleven years ago, it happened less than 50 yards from where Tebow stood. On the first play from scrimmage against LSU on Oct. 10, 1998, a gruesome knee injury ended Florida senior defensive tackle Ed Chester's career. Fortunately for Chester, he had bought an insurance policy from Gainesville agent Keith Lerner after deciding against entering the 1998 NFL draft. Lloyd's of London, the venerable firm that insured Bruce Springsteen's voice and Angie Dickinson's legs, underwrote the policy. Thirteen months later, Chester walked out of Lerner's office with a $1 million check. Chester never played in the NFL, but if he handled his finances correctly, he never had to worry about money again.STAPLES: Policy gave Chester life after career ended

Most players in their prime refuse to consider a career-ending injury, but those who turned down NFL millions to return to college for the 2009 season knew an insurance policy was a must. Whether they got it through an NCAA program for exceptional players or through a private agent, few, if any, players who expect to be taken in the early rounds of the 2010 draft haven't already bought a policy.

"I'm not sure there is anybody who is drafted on the first day that doesn't have an insurance policy," said Lerner, who writes 50-60 policies a year just like the one he wrote for Chester. "It's that big of a business."

It wasn't so big in 1992 when Lerner wrote a policy for Miami quarterback Gino Toretta. The $1 million Lloyd's policy Georgia back Herschel Walker took out in August 1981 made national news, but few other players had thought to protect themselves in the case of a career-ending injury. Through the '90s, business at Lerner's firm, Total Planning, steadily increased. By the time he wrote Miami tailback Willis McGahee's policy hours before McGahee suffered a severe knee injury in the 2003 Fiesta Bowl, Lerner was writing policies for dozens of potential draftees each year. "Insuring college athletes had been done very sporadically," said Lerner, who opened Total Planning in 1989 with the hope of insuring professional athletes. "The part that I kind of created was assembling the information so insurance underwriters can better determine who is going to be drafted in the first round, second round, third round, because we attach a number to each round."

By the time Chester took out his policy, many potential first-rounders purchased insurance either through the NCAA -- which started its program in 1990 -- or through private agents shortly before their final year of college. Now, Lerner said, some of the best players will buy insurance the spring after their freshman season. "Typically, that would be a sophomore who is a very highly ranked player who is probably going to leave after his junior year," said Lerner, who insured several 2009 first-rounders, including a top-five pick. "So he takes out a policy for two years."

Three 2009 first-rounders, Northern Illinois defensive end Larry English, Tennessee defensive end Robert Ayers and Rutgers receiver Kenny Britt, bought policies ranging from $1 million-$3 million from New York-based agent Rich "Big Daddy" Salgado. The most common buyers of policies are players who turned down a chance to go pro (rising seniors and redshirt juniors) or players who plan to turn pro as soon as the NFL permits (rising juniors and redshirt sophomores). Lerner said players used to buy their policies prior to preseason practice. Now, they buy them in January or February to cover them during spring practice.

One high-profile player who chose to return to school this year had an advantage. His father makes his living selling insurance. Kent Bradford, reigning Heisman Trophy winner Sam Bradford's father, is the president of Bradford-Irwin Insurance, an independent agency in Oklahoma City. The elder Bradford specializes in commercial insurance, but his knowledge of the business proved invaluable when researching policies for his son after Sam chose to return to Oklahoma for his redshirt junior season.

Citing client confidentiality, Kent Bradford declined to comment on whether Sam had bought a policy, but he did offer a few tips for players who find themselves in a similar situation. Bradford suggested players disclose every previous injury, no matter how minor, because companies will void policies if an earlier injury wasn't disclosed. Bradford also suggested players make sure they understand completely what must happen between an injury and a payout. "I would highly recommend the player or the player's representative thoroughly understand the exclusions, coverage triggers, rehab requirements, and waiting periods before purchasing the coverage," Bradford wrote in an e-mail. "With today's medical technology, there are very few injuries that result in a player never being able to play again."

Bradford considers a policy a "business expense" for a player who intends to play football for a living. Just how costly that expense is depends on where the player buys his policy and how much protection he needs.

Using a private agent, a player can expect to pay $9,000-$10,000 per $1 million of coverage, Lerner said. In other words, a $5 million policy would cost $50,000. Juanita Sheely, the NCAA's assistant director for travel and insurance, said a $5 million policy through the NCAA's Exceptional Student-Athlete Disability Insurance Program would cost between $25,000 and $28,000. "It's a benefit for the student-athlete," Sheely said, explaining the lower premium. "It's not a profit center for the NCAA."

Despite that discount, however, some players still prefer working with private agents. The $5 million policy is the maximum the NCAA offers, and most potential first-rounders want more coverage. This year, Lerner's firm wrote policies for as much as $15 million. Though Lerner never reached that number, he did write some eight-figure policies. Lerner said he typically determines policy amounts by using the contracts of the previous season's draftees to calculate the amount of guaranteed money a player might expect to receive after taxes. That means Lerner's maximum probably will increase soon. Former Georgia quarterback Matthew Stafford, the No. 1 pick in this year's NFL draft, received a reported $41.7 million in guaranteed money from the Lions. Assuming Stafford is taxed at the federal maximum of 39 percent and the Michigan rate of 4.35 percent, Stafford still would receive more than $23.6 million after taxes.

Lerner also said buying a policy through a private agent allows players an easier transition to professional disability insurance. "As soon as his college policy ends, we can move him into a pro policy," Lerner said. "If there's ever a question come claim time, he was with the same company college and pro. So there's a history, and there's no gap in coverage. And that's key."STAPLES: From A to B: The policy process

Still, buying a policy through the NCAA might be a better option for some. The NCAA offers policies to athletes in football, men's and women's basketball, baseball and hockey. Sheely said football players comprise 80 percent of the 100-120 athletes who buy policies every year. By obtaining a policy through the NCAA, those athletes eliminate one potentially tricky step in the process.

For policies purchased through the NCAA or through private agents, the premium must be paid immediately. Since most players' families don't have $20,000-$100,000 lying around, they must secure a loan to pay the premium. After Sheely's staff evaluates a player to ensure he is draftable and places him in the program, that player is guaranteed a loan through U.S. Bank to pay his premium. Since the terms of the loan are approved by the NCAA, the player doesn't risk his eligibility. Players who secure their own loans cannot accept any perks (lower interest rates, waiving of points) that wouldn't be available to the average bank customer. Otherwise, they would run afoul of the NCAA's extra benefits rule.

In most cases, the balance of the loan is due either after the policy pays out or after the player signs his first contract. That's why Sheely warns borderline players to make sure they want to play professional football before they apply for the loan. She said one player a few years ago was a low-round draft choice and opted to go to graduate school. That left him with no income and a fat bill to cover the loan that paid his premium.

Sheely also works hard to ensure players understand the policy pays out only in the event of a catastrophic, career-ending injury. "Just having an injury that affects your draft status doesn't trigger a payment," Sheely said.

In his research, however, Bradford found policies that cover such losses. Anyone who has bought a new car should be familiar with the concept of gap insurance. In the automotive world, the buyer pays an extra fee so that, in the event of a collision that totals the car, the insurance company will pay the full amount owed on the car instead of market value, which could be significantly lower. The concept is similar in football. Such policies -- which Lerner said are available only to players projected near the top of the first round -- will cover the gap between expected guaranteed money and actual guaranteed money should, for example, an offensive tackle tear his ACL during his senior year and fall into the third round. But because such injuries are far more common than career-enders, there's a significantly higher premium (up to 80-90 percent more, Bradford said) for gap coverage.

Anyone who has bought a homeowner's insurance policy knows underwriters can be persnickety about the exact value of insured items. The same concept applies in football, so agents such as Lerner must be Mel Kiper-esque in their draft projections. They don't want to overcharge their clients for coverage they don't need, and they don't want to upset the underwriters, whose antennae go up when they believe they've paid out more than they should have. "If I write a $5 million policy on somebody, that guy better be a first rounder," Lerner said. "That's very important to me."

What's most important to Lerner, however, is knowing most of his clients haven't seen a dime back from his policies. Since 1989, his policies have paid out only twice, to Chester and to a hockey player. Sheely said that since 1990, only about a dozen NCAA-backed policies have paid out. The rest of the players advanced to the pros, hopefully enjoying more peace of mind during their final seasons in college. "I hope the player never collects," Lerner said. "I would rather see him playing on Sunday."

MORE COVERAGE:STAPLES: Policy gave Chester life after career endedSTAPLES: From A to B: The policy process